CHEYENNE – Wyoming lawmakers on Thursday rejected two bills aimed at boosting revenue from the state’s energy industry.
One would have introduced a consumption tax on electricity generation in the state, the other would have increased the tax burden on the wind energy industry.
Members of the Joint Revenue Committee heard public statements about the two bills for hours, with the bulk of the comments being about laws doubling the state tax on wind power generation from $ 1 per megawatt hour to $ 2 and removing a tax exemption for new bills on wind projects first three years.
The proposal, which was expected to generate several million dollars for the state’s general fund, met opposition from Cheyenne Mayor Marian Orr and Laramie County Commissioner Gunnar Malm, both of whom argued the bill would hamper ongoing and future projects. Orr cited recent Laramie County’s sales tax numbers, which exceeded expectations, largely due to the construction of the Roundhouse Energy project, as an example of the benefits of local wind projects.
“[The project] totally saved the day in these COVID times, ”Orr said. “We were forecasting a 25% drop in sales when we created our budget. We are [now] sit with an increase of over 20% since the beginning of the year. In September alone, we were able to increase sales and tax revenue by 82% from September 2019. “
Orr noted that the city of Cheyenne recently signed a 30-year lease with NextEra Energy to manage the project at the Belvoir Ranch west of the city. Any change in the state’s tax policy would change the game for companies committed to working in the state.
“We’re going to change the parts of the game we play with them – how fair is that?” Orr asked the committee. “And what does that signal to other companies planning to get involved?”
Other representatives from wind energy companies and local governments spoke out against the tax increase, which the Wyoming Business Alliance also spoke out against. Tom Darin, director of western affairs for the American Wind Energy Association, told the committee that Wyoming already has a high tax rate on wind energy compared to other states in the region.
“Raising our taxes with these low regional prices where the market – not the legislature – picks winners and losers, could be a turning point for a successful project,” Darin said. “Most importantly, the income and jobs go to a neighboring state and not stay here in Wyoming. This is really a case where a higher tax rate might seem attractive at first, but please listen to me and the developers and others who will follow me today. “
While most of those who testified were against an increase in the tax on wind power generation, some were in favor of the proposal and, in general, against developing wind farms in the state. Albany County’s Jennifer Kirchhoefer worried about how the wind turbines could distort Wyoming’s pristine landscapes and potentially discourage tourism.
Rep. Tim Hallinan, R-Gillette, who drafted the proposal, was skeptical of the idea that a tax hike would drive projects out of the state.
“I think the fact is we hear a lot crying from the companies that produce this energy,” Hallinan said.
However, Hallinan’s bill was rejected by committee members by 8-5 votes.
The other bill rejected by the committee would have introduced a new excise tax on all electricity generated in the state at $ 1 per megawatt hour produced, including corporate tax credits to offset some of the new tax burden.
Committee co-chair Sen. Cale Case, R-Lander, argued the proposal was necessary to ensure that every potential taxpayer contributes to Wyoming’s existing tax structure. However, he was one of only two lawmakers, along with Rep. Dan Zwonitzer, R-Cheyenne, who voted for the measure.
While both proposals were rejected by the committee on Thursday, part of Hallinan’s bill – the abolition of an existing tax exemption for new wind energy projects for the first three years – will continue to be considered joint corporations by lawmakers in Wyoming next year. The Committee on Elections and Political Subdivisions recently sponsored a bill to repeal the exemption.